The new bailout plan that is said to be the defining moment of the New President Obama’s term is simply not good enough to get the country out of this funk that we have gotten ourselves into. Here are a few facts, of the $819 Billion that this bailout entails only approximately $100 Billion of that will be going to states and local governments to do projects such as roads, bridges, damns, waste water treatment, etc. The rest will be going to banks, corporate entities, and CEO’s pockets.
OK here is a little economics lesson. The economy works on the fact that you spend money on food, gas and other commodities. Your money (your name is now Beth) that you spend at your local grocery store goes to pay Joe, who then buys a new car. Now his money goes to Bill who then also spends money and so forth. As you can see as long as you, Beth or Joe, are spending your money the next person in line keeps their job and continues the trend. When Beth loses her job in a normal functioning economy someone else steps into her place and no real effect on the economy is felt. In this type of economy when Beth loses her job no one takes her place in the economic circle. Thus people stop spending money because they are afraid of losing their job and therefore causing other people to lose jobs and if the process is not stopped eventually as logic follows everyone is out of work and has no money.
So the Bailout is supposed to stop and even reverse this process. The problem with this particular bailout is that only 1/8 of the money is going to projects that create jobs. As I have shown jobs create money for people and people spend money creating more jobs. Do you see my point here? So if more or almost all of this money was going to projects that create jobs then a solution will be at hand. I know what you are asking. What about the banks that are going out of business? Yes they too create jobs and yes I agree that some money needs to be given to the really desperate banks that have shown that are not paying their CEO’s any bonuses. Think about this though. Will banks need money when people have money to put into the bank? Will banks need to be bailed out when people have the money to pay their mortgages? My answer as you can guess is NO! This is how the government needs to be investing virtually all of the bailout money.